THE HUB FOR CANADA’S LEADING PROGRESSIVE VOICES.

While it is now only just over a year since the Occupy Wall Street movement began to draw attention to the wide and growing gulf between the 1% and the 99%, many have been quick to dismiss its staying power. After all, it was pointed out from the very beginning that the Occupy movement really did not have much to offer in terms of concrete policy proposals. Asked by the Wall Street Journal last October about his views on OWS, Martin Feldstein, the prominent Harvard economist, could only say: “I can’t figure out what that’s all about…I haven’t seen what they’re asking for.”

But the vagueness OWS projects in terms of its policy proposals is hardly a basis for dismissing its significance.

President Barack Obama had it right Monday when he told the people of Michigan that so-called right-to-work legislation is about politics, not jobs.

Such legislation, now in place in 23 U.S. states, undermines union finances by giving members the right to withhold dues, even though they continue to enjoy the rights and benefits of a union contract.

These laws are pretty effective in undermining unions. The unionization rate in right-to-work, or RTW, states averages just 7.6 per cent, compared to 18.6 per cent in the non-RTW states.

But independent research shows that jobs, even in manufacturing, do not flow to states that pass anti-union laws.

Governments at all levels in Canada have embarked on an austerity agenda that includes reducing public sector employment and efforts to privatize public services. This policy direction will slow economic growth, harm the quality of public services, and the loss of services will have a larger impact on low-income Canadians than higher income Canadians. Along with these other impacts, this austerity agenda will increase income inequality.

Increased inequality is a phenomenon that has affected many countries since the 1980s—industrial, emerging market and developing. At the same time, some countries have become more unequal than others. Thus, it is important to try to distinguish factors that have been at work universally from factors that have served either to retard or to exacerbate inequality at the national level. The latter category comprises, among others, income transfers, progressive income taxation and active labour market policies aimed at generating decent jobs and full employment. However, this note focuses on the former—the universal factors.

The Canadian North, which includes the Yukon, Northwest Territories, Nunavut, Nunavik, Labrador, and Nunatsiavut, is a vast region rich in Indigenous cultures, pristine landscapes and waterways, natural resources, and increasingly diverse communities. It is also a region known for having the highest rates of chronic housing need in Canada. Across the North, where more than half the population is Inuit (including Inuvialuit), First Nations (including Innu), or Métis, there is chronic housing need (lack of affordability, inadequacy, unsuitability, unavailability) and lower rates of home ownership than in the southern provinces. The 2006 census found home ownership in Nunavut and the Northwest Territories to be 22.7 and 52.9 per cent, respectively, compared to 71 per cent in Ontario or 73 per cent in Alberta. In most small, northern communities in Canada, social housing is the main, if not only, option, with very few opportunities for home ownership. Limited opportunities for home ownership are compounded by the high rates of unemployment in many small, northern settlements.

I don’t know whether it’s smugness or indifference, but we Canadians can be a self-deluding lot. Growing inequality, portrayed recently in The Economist as a global scourge, when viewed from Canada, seems to be a problem only for others.

After all, it was other countries’ banks that crashed in 2008. It’s in southern Europe that tens of thousands are taking to the streets. And it was in France and the United States that recent elections were fought over the fact that those who created the mess, the top 1 per cent, are still getting big bonuses and low tax rates.

"The ideas of economists and political philosophers … are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." - John Maynard Keynes, The General Theory of Employment Interest and Money (1936)

In economics, hope and faith coexist with great scientific pretension and also a deep desire for respectability. - J.K.Galbraith, New York Times Magazine (June 1970)

The policy community praises the ideal of “evidence-based” policy – policy with a solid research base. In the real world, however, we all know that public policies, as implemented, are more often than not only vaguely related to research results and the best available data.

This is the first section of a three-part commentary by Sheila Block on our Equality Project report. Stay tuned over the coming weeks as we release parts two and three.

The Broadbent Institute paper provides an overview of the complex range of causes of Canada’s increased income inequality. They range from changes in how economic activity is organized and located internationally to domestic policy decisions. Some, like changes in patterns of international trade and production or technological change, can make the problem seem very large and intractable. That is why it is particularly important to identify those government policies that have contributed to increased inequality. These policies that concentrated wealth and power in the hands of the few to the detriment of the many were not inevitable. The politicians who implemented them made choices, and those choices can be reversed. Reversing these policy decisions is an important step to addressing inequality in Canada.